Organic Farm Business Plan

Organic Farm Business Plan
ORGANIC FARM BUSINESS PLAN

(GOLD HARVEST ORGANIC FARM)
(LITTLE BOY AGRI-CARE)

(MIRPUR # 11)
(DHAKA, 1207)
(30/11/2015)
Page 1 of 28
TABLE OF CONTENTS
1.0
Executive Summary............................................................................................................
1.1
1.2
1.3
1.4
2.0
Business Objectives.......................................................................................................................................
Mission Statement.........................................................................................................................................
Guiding Principles.........................................................................................................................................
Keys to Success.............................................................................................................................................
Company Description.........................................................................................................
2.1
2.2
2.3
2.4
3.0
Ownership.....................................................................................................................................................
Legal Form....................................................................................................................................................
Start-Up Summary.........................................................................................................................................
Location and Facilities..................................................................................................................................
Products...............................................................................................................................
3.1
3.2
3.3
3.4
3.5
3.6
4.0
Products/Services Descriptions.....................................................................................................................
Competitive Comparison...............................................................................................................................
Product/Service Sourcing..............................................................................................................................
Inventory Management.................................................................................................................................
Warehousing and Fulfillment........................................................................................................................
Future Products/Services...............................................................................................................................
Market Analysis................................................................................................................
4.1
4.1.1
4.1.2
4.1.3
4.1.4
4.2
4.3
4.3.1
4.3.2
4.3.3
4.4
5.0
Marketing Strategy and Implementation.......................................................................
5.1
5.1.1
5.1.2
5.1.3
5.1.4
5.2
5.3
5.4
5.5
5.5.1
5.5.2
5.5.3
5.5.4
5.5.5
5.6
5.6.1
5.6.2
5.7
5.8
5.9
6.0
6.1
6.2
6.3
Industry Analysis.........................................................................................................................................
Market Size.............................................................................................................................................
Industry Participants...............................................................................................................................
Main Competitors...................................................................................................................................
Market Segments....................................................................................................................................
Market Tests................................................................................................................................................
Target Market Segment Strategy.................................................................................................................
Market Needs..........................................................................................................................................
Market Trends.........................................................................................................................................
Market Growth........................................................................................................................................
Positioning...................................................................................................................................................
SWOT Analysis...........................................................................................................................................
Strengths.................................................................................................................................................
Weaknesses.............................................................................................................................................
Opportunities...........................................................................................................................................
Threats.....................................................................................................................................................
Strategy Pyramid.........................................................................................................................................
Unique Selling Proposition (USP)..............................................................................................................
Competitive Edge........................................................................................................................................
Marketing Strategy and Positioning............................................................................................................
Positioning Statement.............................................................................................................................
Pricing Strategy.......................................................................................................................................
Promotion and Advertising Strategy.......................................................................................................
Website....................................................................................................................................................
Marketing Programs................................................................................................................................
Sales Strategy..............................................................................................................................................
Sales Forecast..........................................................................................................................................
Sales Programs........................................................................................................................................
Legal............................................................................................................................................................
Milestones...................................................................................................................................................
Exit Strategy................................................................................................................................................
Organization and Management.......................................................................................

Organizational Structure..............................................................................................................................
Management Team......................................................................................................................................
Management Team Gaps.............................................................................................................................
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6.4
6.5
7.0
Personnel Plan.............................................................................................................................................
Board of Directors.......................................................................................................................................
Financial Plan....................................................................................................................
7.1
7.2
7.3
7.4
7.5
7.5.1
7.5.2
7.5.3
7.6
Important Assumptions...............................................................................................................................
Start-Up Costs.............................................................................................................................................
Source and Use of Funds.............................................................................................................................
Break-Even Analysis...................................................................................................................................
Projections...................................................................................................................................................
Projected Profit and Loss........................................................................................................................
Projected Cash Flow...............................................................................................................................
Projected Balance Sheet..........................................................................................................................
Business Ratios...........................................................................................................................................
Page 3 of 28
1.0 Executive Summary

Once the humble family vegetable garden, Gold Harvests Organic Farm is today a one acre
working farm with over 30 varieties of vegetables. When Frank Burns was laid off from his
corporate position three years ago, he first he turned to the vegetable garden for money
saving / economic reasons. But with the uncertainty of recent events in the Middle East, the
energy crisis, the long term effects of reliance on fossil fuels, and his personal philosophies
on conservation, Frank Burns and his wife Kathy, turned this family vegetable patch into a
thriving certified organic produce business.
Gold Harvests Organic Farm is based on the sound principles of conserving natural resources,
limiting the carbon footprint, growing, hiring and eating locally grown and prepared foods,
and making the world a better place to live in. This unique perspective clearly shows in the
quality of the produce, the well cared for gardens, and natural friendliness and ease of its
owners.
Gold Harvests Organic Farm was created to meet the growing needs of a community that
shares these same views and is concerned about what they eat and feed their children. This is
a community that is tired of fresh tomatoes bought at the local grocery store. When more
than likely the fresh tomatoes were picked while still unripe, shipped 3,000 miles over
several days/weeks, and then artificially "ripened" using ethylene gas, thus robbing it of
practically all of its nutritional value.
Gold Harvests Organic Farm is a Community Supported Agriculture (CSA) Business
entity. CSA is both a marketing strategy and a philosophy. The farmers sell shares
(subscriptions) in the next seasons produce, usually before the season begins. Each week of
the season, the member receives a share of produce from the farm. In some cases the
members are involved in decision-making of all aspects of the operation; in others the farmer
makes all the decisions. Each CSA is as unique to the farmer and the community it serves.
Members may pick up their boxes at the farm, at delivery sites, or home delivery may be
offered.
The purpose of this business plan is to provide a blueprint for near term and long term goals.
The business plan will be utilized as a tool to gauge how well the farm is doing in the future
compared to their initial goals and keep them on target. The business plan is also a tool for
lenders, explaining the need for initial financing, the source and use of funds, and debt
repayment capabilities.
1.1 Business Objectives
Gold Harvests Organic Farm has simple objectives: provide healthy and delicious
tasting vegetables while simultaneously leaving a minimal carbon footprint. In order
to accomplish this, the farm plans to:
Sell 60 shares by Year 2 and have full-time income or 90 shares sold by Year 3.
In Year 4, Gold Harvests Organic Farm plans to purchase an additional 9 acres
for a total of 12 acres. The initial 3 years of operations will provide the
excellent credit history and track record necessary for this large purchase.
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1.2 Mission Statement

Gold Harvests Organic Farms mission is to raise the best tasting and finest quality
fruits and vegetables for the local community. Gold Harvests Organic Farm uses only
natural and sustainable farming methods, free from pesticides or fertilizers. Natural
foods and natural farming methods leaves a smaller carbon footprint while
simultaneously improves the health of its customers and its local community.
1.3 Guiding Principles
Gold Harvests Organic Farms slogan is simple: Live life simply and simply live. The
owners also believe in contributing to their community and the planet by:
1. Local
Gold Harvests Organic Farm believes that in order for the survival of the planet,
we must rely on local resources. Buying from local farmers supports the local
economy.
2. Sustainable Living
By reducing reliance on energy is better for the planet and conserves our natural
resources.
3.
Satisfied Customers
Happy members ensure repeat business and their referrals grow the business.
1.4 Keys to Success
Below are a Gold Harvests Organic Farms Keys to Success:
Superlative Communication Gold Harvests Organic Farm keeps its members

current on all aspects of the farm through its weekly newsletters and blog
updates on what is happening during the winter months such as new and exciting
vegetable offerings being planted in the greenhouse. Additionally, Gold Harvests
Organic Farm encourages member feedback and input and has its members
complete surveys and questionnaires regarding how the farm is doing and what
can be done to improve operations.
Healthier Food Choices - All vegetables are USDA certified organic. The
vegetables are pesticide free and chemical free and no preservatives are used.
Support the Local Economy - Statistically more than 70 percent of the local food
supply is grown outside the state. Buying from Gold Harvests Organic Farm
ensures that its members buy locally and creates jobs that support the local
market.
Offer Personalized Selections - Gold Harvests Organic Farm strives to be the
leading CSA farm supplier of choice by providing customized offerings to its
members. If, say a member wants a cucuzzi fruit Gold Harvests Organic Farm
will grow this item if the soil and temperatures can accommodate this item. By
providing foods the customers want (and will actually eat) cuts down on waste
and makes the planet a better place for everyone.
Home Delivery. Gold Harvests Organic Farm will establish weekly delivery times
that are convenient for its customers. This saves customers time and gas money
making everyone happy. Alternatively customers will also have the option to pick
up directly at the farm.
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2.0 Company Description

Frank and Kathy Burns run, manage, and operate Gold Harvests Organic Farm. The
company initially sold farm to market then quickly began supporting local restaurants with
surplus (waste) sold at the local farmers market. Frank and Kathy are operating the business
as a CSA, a business for the first time this year.
The Burns selected the CSA model, in which both the farmer and the members have a mutual
interest in the crop. And because the shares are essentially presold prior to planting, the
waste factor (or excess crops risk) are eliminated. Based on their success at the farmers
market and local restaurants, the Burns have already sold 100 percent of their 30 shares.
Gold Harvests Organic Farm is located on one of three acres located at the Burns primary
residence in Plymouth, Wisconsin.
During the off season, the owners of Gold Harvests Organic Farm will actively target and
market new members, engage in public speaking events, and complete their forthcoming E
Books.
2.1 Ownership
Gold Harvests Organic Farm is a C-Corporation formed in the State of Wisconsin and
is wholly owned by Frank and Kathy Burns.
Frank Burns, a former Human Resources Director at Sargento Cheese, was recently
downsized. Not desiring to re-enter corporate America, and concerned about the
environment, global issues and the state of the economy, Frank began expanding his
family garden. What began as a way for the family to save some money and reduce the
carbon foot print, today has grown from its small acre plot to over 1+ acre with plans
for expansion to 12+ acres. A shrewd businessman and well known in the community,
Frank initially approached colleagues and friends in the local restaurant community.
These connections marked the beginning of business for the startup farm and as word
of mouth spread, Gold Harvests Organic Farm attracted ten other additional restaurants.
All surplus was sold at the local farmers market.
Kathy Burns is an elementary school teacher for the Sheboygan Area School District.
A graduate of Marquette University in Milwaukee, Kathy has been teaching fifth grade
Science for over ten years. Raised on a family dairy farm, Kathys family also had a
small fruit and vegetable farm and she loved helping the family grow and harvest the
crop. Mrs. Burns summer schedule is flexible and helps the family maintain the
garden during the busy summer growth season.
2.2 Legal Form
Gold Harvests Organic Farm is C-Corporation formed in the State of Wisconsin. The
entity is wholly owned by Frank and Kathy Burns.
2.3 Start-Up Summary
The Burns have been managing the family farm successfully for the last fifteen years.
Recently the owners installed a greenhouse with warming lights for early starts. They
also invested in a pickup truck (2005 Ford F150) for delivering vegetables to the
members. Most recently they purchased a tractor and borrowed their neighbors
attachments as needed for harvest.
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Last year, Gold Harvests Organic Farm passed the stringent requirements needed to
qualify as certified organic as deemed by the USDA. This allows them to market all
produce as organic and can also bring higher margins when surplus produce is sold
outside the CSA or to restaurants or market stands. The Burns realized that although
consumers may not understand all the requirements associated with the organic label
(such as pesticide control and fertilizers), the consumer is comfortable with the label.
This, is one of the keys, they believe which will set Gold Harvests Organic Farm apart
from its peers.
All pre-harvest and harvest supplies have been paid for out-of-pocket. The owners have
already spent in excess of $40,000 to start their farm business.
When the owners announced they were becoming a CSA, the news traveled fast and
demand for their products was so great that they have already presold 100 percent of
their shares for the upcoming growing season. In order to meet these demands and
meet the opportunity for growth, the owners are seeking an operating loan from the
USDAs Farm Service Agency, Insurance Company or private investor.
The credit facility will be used to meet operating and cash flow needs for the pre
harvest and harvest season. The $14,500 credit facility will be secured by a first lien
position on the 3 acre plot of land, all buildings and improvements (a greenhouse). The
land is valued at $30,000 and is currently owned free and clear by the Burns. The land
is adjacent to the Burns primary residence.
2.4 Location and Facilities
Gold Harvests Organic Farm is located in Plymouth, Wisconsin, located in Sheboygan
County Wisconsin. Sheboygan County is located in east-central Wisconsin. Sheboygan
County is a one-hour drive to Milwaukee and Green Bay, and less than a 3 hour trip Chicago.
Interstate 43 and State Highways 23 and 57 make are the main highways.
Sheboygan Countys population is 117,566. It has grown 4.4 percent between 2000 and 2009.
The County is expected to continue to grow by a similar rate until 2015 when it reaches a
population of 123,209. Major employers include: Kohler Company, Bemis Manufacturing,
Aurora Health Care, Johnsonville Sausage, Rockline Industries, and Sargento Foods. The
City of Plymouth is located in west-central Sheboygan County along State Highways 23, 57,
and 67. It is the second largest municipality in Sheboygan County and one of the fastest
growing in the County. (Sheboygan County Economic Development Corporation).
3.0 Products
3.1
Products/Services Descriptions
Gold Harvests Organic Farms growing season will start in early May and end in October
with the goal of 20 weeks. Shares will be comprised approximately 10-15 different crops
every 8 weeks of in-season produce. Here is an example of types of produce throughout the
season:
Spring: Beets, Broccoli, Cabbage, Carrots, Garlic, Green Onions, Kale, Lettuce (several
varieties), Radishes, Peas, Spinach
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Summer: Beans, Carrots, Cucumbers, Eggplant, Green Onions, Leeks, Melons, Onions,
Sweet Peppers, Summer Squash, Tomatoes, Zucchini
Fall: Beans, Beets, Broccoli, Cauliflower, Cucumbers, Chard, Lettuce (several varieties),
Potatoes, Red Onions, Spinach, Winter Squash.
All share sales are sold in advance.
A Full Share will provide a family of four vegetables for a week. (estimate). Likewise, a Half
Share provides a week of vegetables for two people. Full Shares are $750 and Half Shares are
$375 for the season. (The owners are currently only considering the sale of Full Shares at
this time).
The Burns will utilize a detailed planting schedule which historically has helped immensely
especially in the hectic summer planting season. The detailed guide begins with the plantings
that tolerate the coldest spring and these are started in their greenhouse. Summer crops will
be shaded with cloths if necessary (like spinach for instance). The farmers will plant many
tomatoes (which are very popular) and only some eggplant which is less popular. Other
considerations that are detailed in the planting calendar will be the amount of produce that is
needed. One way to plant more is to plant smaller amounts more often. Examples include
broccoli, carrots, scallions, and summer squash. The Burns have learned that planting these
items two or three times during the growing season yields more crop and the surplus can
readily be sold at the farmers market. Picking peas is difficult at harvest time, so the Burns
always plan to plant surplus to make harvest time worthwhile. It is expected that any surplus
can be sold at the farmers market.
3.2 Competitive Comparison
Plymouth, Wisconsin, reports six CSA entities, of which three represent direct
competition for the subject.
3.3 Product/Service Sourcing
All produce will be grown on Gold Harvests Organic Farm. Frank and Kathy Burns
will both actively work and manage the farm.
Distribution
At Gold Harvests Organic Farm, members have the option for home delivery or to
travel to the farm on the scheduled pickup day.
The home delivery choice is what most members prefer and allows the Burns to deliver
the farm fresh produce directly. This distribution method has the least carbon footprint,
with one driver and one truck. It is obviously the most intensive for the Burns and with
busy summer season, this can be too time consuming for them. Items are delivered in
reusable boxes. This distribution method represents any easy way to deal with any
shortfalls in produce the Burns will simply mix and match items for the members.
Alternatively, the members have the option to pick up the produce directly at the farm.
The Burns enjoy this option especially during the busy season, because it frees up some
of their time. This option requires that the driveway be easily accessible to the
members and that the farm appears in good condition at all times. This onsite setup
allows members to view firsthand what is growing, the condition of the plants and soil.
The members will also be aware of any draught issues for example, and what
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remediation efforts the farmers are taking to care for the crops. On pickup day, the
Burns have setup a stand and a buffet-style layout in which members can pick and
choose up to a specific limit of produce for that week. This option creates a festive
environment on the farm in which members can interact with each other, the farmers,
and exchange recipes. If any shortfalls exist, this mix and match buffet style provides
the solution. Just like home delivery, members are given a one box to fill and refill
weekly with their selections for the duration of the growing season.
3.4 Inventory Management
N/A. The CSA farm concept is all about freshness. The produce is delivered
immediately from the farm to the (members) table
3.5 Warehousing and Fulfillment
N/A
3.6
Future Products/Services
The owners of the farm have plans to introduce honey bees the following season
and offer honey as another organic product.
On occasion, Gold Harvests Organic Farm partners with its neighboring dairy
farm and an organic bakery in town. From time to time members will find fresh
cheeses and organic breads in their weekly selection boxes. Gold Harvests
Organic Farm owners are currently considering joining forces with a local
orchard company as well. The orchard will supply apple butter and jams.
Within one year, Gold Harvests Organic Farm plans to utilize an additional
acre and add 30 more families to their growing share program. They plan to add
30 more families (shares) by Year Three.
Gold Harvests Organic Farm has long term plans to purchase an additional 9
acres or a total of 360 shares. To support the farm, they will hire apprentice
farmers, part-time delivery drivers and a bookkeeper. The Burns would then be
able to focus their efforts on crop research, marketing trends and their members.
Part of the focus of organic growing is returning back to the community. All
employees will earn fair wages for work performed.
Other future plans include accessing the internet to increase awareness and the
importance of local and community farming. Kathy Burns is compiling a recipe
E-book which will supplement cash flow during non-productive months. In his
spare time, Frank Burns is also compiling an E-Book to sell on Gold Harvests
Organic Farm website. The book will focus on modern organic farming
techniques for the novice farmer. A second book is forthcoming dealing with
environmental concerns and social responsibility.
Additionally, Gold Harvests Organic Farm will publish a weekly newsletter to

be included in the members box as well as the website. The newsletter will
identify what is in the weekly box, what is happening on the farm and recipes.
The newsletter will educate members to seasonal eating and sustainable
principles.
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Gold Harvests Organic Farm has future plans for constructing a vegetable
processing area with electricity and water. The facility will have a walk in
cooler, a washing and grading area, stainless steel tables and two scales.
Additional capital expenditures will be for the purchase of a newer (used)
pickup truck and attachments for their tractor. (Currently they borrow their
neighbors).
4.0 Market Analysis

Sheboygan Countys cost of living is lower than the national average and housing costs are
much lower than the national average. At the same time, Sheboygan County personal income
is greater than the national average. In other words, this community not only has a high
demand for organic items, but it can afford them as well.
4.1 Industry Analysis
This analysis is based on the North American Industry Classification System
(NAICS) 111998: Agriculture All Other Miscellaneous Crop Farming. The US
crop production industry includes about 1 million farms with combined annual revenue
of about $205 billion. Major companies include Dole Food Company, Chiquita Brands
International, and Sunkist Growers. Crop farming is the growing and harvesting of field
crops such as grain, oilseeds, tobacco, dry beans, potatoes, vegetables and melons, fruits
and nuts, and floriculture.
Global crop production revenue exceeds $1 trillion. The US and China are among the
top crop producers. Large companies outside the US include Fresh Del Monte Produce
(headquartered in Cayman Islands); Total Produce (Ireland); and Amaggi Exportao e
Importao (Brazil).
Demand is driven by federal agricultural policy programs, food consumption trends,
and the grain and oilseed export market. The profitability of individual companies
depends on maximizing crop yield and minimizing disease risk. Large companies have
advantages in highly automated technologies and access to the latest in seed and crop
technologies. Small operations can compete effectively by harvesting heirloom, nongenetically modified (GM), or specialty products. The industry is capital-intensive:
average annual revenue per employee is about $390,000. (First Research)
The CSA makes the following generalizations/guidelines regarding its industry:
4.1.1
New entrants should practice farming 2 years prior to making a commitment to

the challenge of CSA farming
In general, 20-30 shares per acre is possible
30 shares per farmer or laborer is possible
To earn full time income 80-100 shares may be necessary
The share price ranges from $300-$800 per share annually ($15-$40 per share
weekly) (CSA Michigan 2012)
Market Size
The US crop production industry includes about 1 million farms with combined
annual revenue of about $205 billion. (First Research)
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Although the USDA does not have official statistics on U.S. organic retail sales,
information is available from industry sources. U.S. sales of organic products
were $21.1 billion in 2008--over 3 percent of total food sales and were expected
to reach $23.0 billion in 2009. (Nutrition Business Journal)
4.1.2
Industry Participants
Major participants include Dole Food Company, Chiquita Brands International,
and Sunkist Growers. (First Research)
4.1.3
Main Competitors
Plymouth, Wisconsin reports six CSA entities, of which three represent direct
competition for the subject.
Backyard Bounty
W4873 County Hwy U
Plymouth, WI 53073
http://ljcomerford.wordpress.com/
This is a 22 acre family owned farm and has been operating as a CSA for several
years. In addition to its offerings of organic fruits and vegetables this farm also
sells organic poultry and eggs. The farm had mixed reviews by its members.
Eilerts Acres
N5575 County Road ZZ
Plymouth, WI 53073
http://www.eilertsacres.com/
Owned by Edward and Kay Eilert, this farm began business as a CSA in 2011.
The farm provides many of the same vegetables as the subject as well as
providing farm to door delivery service.
Springdale Farms
W7065 Silver Spring Lane
Plymouth, WI 53073
http://www.springdalefarmcsa.org/
This CSA farm is the most established in the direct market and has been in
existence 20+ years. Springdale Farm has various pick up sites in the greater
Sheboygan MSA. Based on the farms website, members are not given the
option to select specialty vegetables and instead members are encouraged to
trade-in any unwanted produce back to the community to share and thus avoid
waste. This has not proven to be a deterrent for the farms following. For the
most recent growing season, the farm has a waiting list.
The following are CSA businesses that compete indirectly with the subject:
Old Plank Farm
W6028 County Road C
Plymouth, WI 53073
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http://www.oldplankfarm.com/
This entity only sells its goods at a local farm stand; it does not sell shares. In
addition, this indirect competitor sells organic eggs at its farm stand. Based on
its limited selection and differing offerings, this indirect competitor attracts
individuals who are only seeking small, specialty quantities of produce, but do
not want to commit to purchasing shares for a full season.
Log Cabin Orchard
N4797 County Rd E
Plymouth, WI 53073
www.logcabinorchard.com
This indirect competitor is a fruit orchard selling apples, pears, plums, honey,
apple and maple syrup, fresh apple cider and apple butter. In the fall, this CSA
generally offers U-Pick apples options. Due its differing selection of products,
this entity is not a direct competitor.
Red Twig Farm
http://redtwigfarm.wordpress.com/
This entity only sells to Goodside Co-op and Trust Local Foods; because this
CSA farm differs in its target client, it is does not represent a direct competitor
for the subject.
4.1.4
Market Segments
2008, Sheboygan Countys median household in-come was $51,681 and the
mean household income was estimated to be $61,889.
Nearly 72 percent of Sheboygan Countys housing units are owner-occupied.
The median housing value in Sheboygan County is estimated to be $149,700,
which is $43,000 less than the United States estimated median home value. At
the same time, Sheboygan County income is higher than the national average,
which is the reason for high home ownership rates.
Gold Harvests Organic Farm is targeting the households with incomes above
$50,000. The target market represents approximately 51.5 percent of the total
population, which should easily absorb Gold Harvests Organic Farms entrance.
Sheboygan Countys population is 117,566. It grew 4.4 percent between 2000
and 2009. The County is expected to continue to grow by a similar rate until
2015 when it reaches a population of 123,209.
4.2 Market Tests

While selling produce to local restaurants, Mr. Burns realized that the CSA option
could potentially come to fruition. Historically the restaurant patrons always asked the
source of the beautiful and delicate lettuces and quality tomatoes. Realizing the
popularity of his produce, Mr. Burns, while continuing on a quest for global carbon
footprint reduction, began researching the possibility of beginning a CSA effort. With
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the help of his restaurant partners, Mr. Burns posted fliers and brochures in their
lobbies. By the end of the summer, Gold Harvests Organic Farm had presold 100
percent of the shares for the upcoming growing season.
4.3 Target Market Segment Strategy
Gold Harvests Organic Farm is targeting households with earnings in excess of $50,000
in the greater Sheboygan County. Approximately 51 percent of the population resides
in this category. Other farmers have missed this target by focusing on traditional
farming methods while Gold Harvests Organic Farm has obtained the Certified Organic
stamp of approval. Additionally, Gold Harvests Organic Farm will focus its energies
primarily on its members and provide services exceeding expectations by offering farm
to door delivery service, providing supplemental local organic products and by
providing a festive like atmosphere at the farm especially on harvest day and other
special occasions.
The following chart depicts the target market:
4.3.1
Market Needs
According to a USDA survey of market managers (Organic Produce, Price
Premiums, and Eco-Labeling in U.S. Farmers' Markets, April 2004) found that
demand for organic products was strong or moderate in most of the farmers'
markets surveyed around the country, and that the managers felt more organic
farmers were needed to meet consumer demand in many states. (USDA updated
06/19/12)
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As demonstrated on the national map Sheboygan County represents a strong

demand for organic produce.
Organically grown is the key. The term organic is now legally defined and
can only be used to describe produce that is grown in accordance with the USDA
rules and is certified as such by an independent agency.
4.3.2
Market Trends
While consumers may not understand all the requirements associated with being
certified organic, they are comfortable with the label. Which is why Gold
Harvests Organic Farm sought the services of the independent certification
agency and has earned the distinction to be labeled an organic farm.
Comparatively their CSA counterparts that continue to operate by traditional
farming methods, Gold Harvests Organic Farm holds itself to a higher standard,
which in time, they believe will attract and keep new members.
4.3.3
Market Growth
U.S. sales of organic products were $21.1 billion in 2008 - over 3 percent of total
food sales- and were expected to reach $23.0 billion in 2009 (Nutrition Business
Journal).
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4.4 Positioning
Gold Harvests Organic Farm is aware that its members are crucial to its survival and
growth. The owners will make certain each member feels that Gold Harvests Organic
Farm is indeed his/her farm! After all, they do own a portion of the farm! The Burns
will encourage its members to stop by to see operations. In addition the owners will
host an open house at harvest time to celebrate the seasons bounty.
To further ensure its members are satisfied and encourage retention, the owners will use
surveys and questionnaires as tools to gauge member satisfaction.
The
surveys/questionnaires will allow members to express feedback and also represent
additional opportunities to communicate with Gold Harvests Organic Farm.
5.0 Marketing Strategy and Implementation
Gold Harvests Organic Farm is targeting households with earnings in excess of $50,000 in
the greater Sheboygan County. Other farmers have missed this target by focusing on
traditional farming methods while Gold Harvests Organic Farm has obtained the Certified
Organic stamp of approval. Additionally, Gold Harvests Organic Farm will focus its energies
primarily on its members and provide services exceeding expectations by offering farm to
door delivery service, providing supplemental local organic products and by providing a
festive like atmosphere at the farm especially on harvest day and other special occasions.
5.1 SWOT Analysis

SWOT stands for strengths, weaknesses, opportunities and threats. The following is
the SWOT analysis for Gold Harvests Organic Farm.
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5.1.1
Strengths
Gold Harvests Organic Farm receives share proceeds prior to start of the
season which helps to pay for seeds, supplies and inputs
During the off-season the owners of Gold Harvests Organic Farm can
market and recruit new members and complete their E Books
Gold Harvests Organic Farm will establish long term relationships with
its members lasting at least one season
Members share in the financial risks of the farm
Low capital requirements, relatively inexpensive startup business
5.1.2
Weaknesses
As many as 30 or more different crops must be grown to provide
diversity to members throughout the season
Location-if the farm is not close to its customers, it becomes burdensome
for the farmer to make deliveries
Labor intensive during the season, crops are continually being planted,
harvested, cleaned, sorted and packed leaving little extra time for the
farmer
Member retention is key if the member is not happy the likelihood of
returning next season or providing a good recommendation is not good.
5.1.3
Opportunities
The greater Sheboygan County is a prime location for organic produce
with an historically high demand.
Because many farmers still utilize traditional farming methods (pesticide
and herbicide applications) Gold Harvests Organic Farm stands out from
the crowd with its Certified Organic stamp of approval
Threats
New entrants to the market pose a threat. Partially mitigating this risk is
the recommended 2-3 year trial farming period which would give Gold
Harvests Organic Farm the necessary heads-up to go against (said)
competitors.
Weather, storms, pests can damage or even destroy crops.
The farm is economically tied, and in inflationary times, consumers could
revert back to traditional methods of buying fruits and vegetables at the
local grocery store.
5.1.4
5.2 Strategy Pyramid

Strategy
Create awareness that Gold Harvests Organic Farm delivers a wide
variety of quality wholesome and healthy vegetables on a consistent
basis.
Tactics
Create a specific, detailed planting guide, planting several times over
the growing season.
Programs
Post fliers and brochures at local restaurants, and locally owned and
operated organic/natural item stores in town.
Strategy
Create a community of awareness to think globally, act locally.
Page 16 of 28
Tactics
Programs
Constant communication with members will foster the awareness who

in turn will relate these ideals to the local community.
Host open house events at Gold Harvests Organic Farm for special
events such as Harvest Time and Earth Day.
5.3 Unique Selling Proposition (USP)

Kathy and Frank Burns stand out from the competition: They are experienced
operators and have demonstrated ability to grow large quantities of many different
vegetables. They have demonstrated their ability to manage the crops, harvest, pack
and deliver to their customers. They are doing business as a CSA. And unlike their
conventional farming peers, Gold Harvests Organic Farm has met the stringent
requirements to be designated Certified Organic.
5.4 Competitive Edge
CSA farming differs greatly from traditional farming due to the fact that members have
ownership shares in the farm. Bearing this in mind, Gold Harvests Organic Farm will
wholeheartedly focus on this vital aspect to retain members. The owners will
constantly stay in touch with their members and encourage them to come and visit
their farm.
Unlike its traditional farm stand competitors, Gold Harvests Organic Farm will offer a
variety of selections - up to 30 different types of produce during season. It should be
noted that variety is a double edged sword: Many members will join a CSA because of
the variety of offerings. It is important to have plenty of the basics like green beans,
tomatoes and carrots. Conversely, too little a selection will be disappointing. To meet
this balance, the Burns have created a questionnaire asking members what they prefer.
The Burns also provide weekly recipes and meal planning tips to coincide with the
weekly boxes. Customers like the convenience of knowing how to prepare the items
they are picking up from their farm.
5.5 Marketing Strategy and Positioning
Gold Harvests Organic Farm will utilize product differentiation to stand apart from the
competition. By growing wholesome organic produce, offering farm to door service,
and actively engaging with its members, Gold Harvests Organic Farm will go above
and beyond to maintain and grow its member base.
5.5.1
Positioning Statement
Gold Harvests Organic Farm will be the premier organic CSA in the greater
Sheboygan County by offering at least 30 of the most delicious and mouth
watering organic vegetables available in the local growing area and by providing
exceptional relationships with its members, its community and the planet.
5.5.2
Pricing Strategy
Gold Harvests Organic Farm will utilize a fair price for a fair value. Some
research suggests that the CSA farm is usually lower in price than organically
grown food from local markets and is often less than foods from the supermarket.
This could be a selling point for attracting new members, however, it also
important to note this in not about cheap food.
Page 17 of 28
5.5.3
Promotion and Advertising Strategy

The best strategy is word of mouth advertising.
their shares they tell friends.
When people are happy with
Gold Harvests Organic Farm will place brochures with other CSA businesses
such as the local organic bakery and neighboring dairy farm.
Gold Harvests Organic Farms website will provide additional marketing
information. In addition to its map and location, Gold Harvests Organic Farm
will be listed with other CSA organizations such as national CSA and the USDA.
In the off season, the Frank Burns will provide lectures to civic and
environmental groups.
During harvest time, the farm will be open to the public to browse and purchase
surplus from the harvest bounty. They will also host special events such as Earth
Day.
5.5.4
Website
Gold Harvests Organic Farms website will be a vital key in marketing. In
addition to providing its history, location and contact information, the site will
also have links to its CSA affiliations, the USDA website and current organic
industry topics. The website will also have links to the current weekly newsletter
(during season) and off season the owners will maintain a blog of what items are
currently going to seedlings in the greenhouse and what new and exciting
produce will be available in the upcoming season.
Additionally, the site will have links to Kathy and Franks forthcoming E-books
which will provide additional cash flow during the non-production months.
The site will also take advantage of social media and have a Facebook link as
well.
5.5.5
Marketing Programs
Gold Harvests Organic Farm will actively work to engage its members and local
community by:
Creating fliers and brochures and posting in community gathering places
such as churches, community centers, farmers markets and other
environmentally centric business.
Gold Harvests Organic Farms website with emphasis on its USDA
Certified Organic stamp of approval; the website will also have links to
the USDA website and the national CSA website.
Word of Mouth will play an important role.
5.6 Sales Strategy

Gold Harvests Organic Farm has already sold all 30 of its shares for the upcoming
season with future plans to sell 60 shares in Year Two and 90 shares in Year Three. In
order to meet these goals, the farmers will continue to rely on advertising fliers, its
online presence and most importantly word of mouth. The word of mouth
Page 18 of 28
recommendation from a satisfied member not only generates an opportunity for repeat
business, but also is beneficial in recruiting new members.
5.6.1
Sales Forecast
The following table represents the annual sales forecast for the initial three years
of operations:
Table 5.6.1
5.6.2
Annual Sales Forecast
Sales Programs
Gold Harvests Organic Farms primary sales program is the sale of shares.
Additional sales programs will come from the sale of their forthcoming books.
Honey production is expected to come online by Year Three.
During the slow winter months, both Frank and Kathy Burns will actively market
their Gold Harvests Organic Farm, by providing speaking engagements at local
events, becoming involved in the local community primarily its environmental
issues, and writing and publishing papers supporting locally grown businesses.
This slower time will also be utilized to create the weekly newsletter templates
which coincide with the weekly deliveries. Historically the members love the
newsletters which facilitate additional contact between farmer and member.
The weekly newsletter summarizes what is included in the weekly delivery,
offers recipes and cooking suggestions, and summarizes what activities are
transpiring at the farm. (This will be helpful especially during the busy summer
months when there is little time available to write the weekly newsletters).
5.7 Legal
Gold Harvests Organic Farm is a C-Corporation doing business in the State of
Wisconsin.
5.8 Milestones
The following chart depicts the Milestones Gold Harvests Organic Farm anticipates
achieving:
Table 5.8
Milestones
Page 19 of 28
5.9 Exit Strategy

In the event that Gold Harvests Organic Farm will cease operations, all assets (farm
equipment, tools, scales) will be sold at auction. Proceeds from the sale will be first be
used to pay off the financial obligation to the operating capital loan and the remaining
proceeds will be paid to the members (if any obligations remain).
6.0 Organization and Management
6.1 Organizational Structure
Gold Harvests Organic Farm will be wholly owned and operated by Frank and Kathy
Burns. Mr. Burns will perform all office and accounting functions such as calculating
the initial garden costs, seed costs and planting times. Both owners will harvest the
crop. Gold Harvests Organic Farm will hire one apprentice farmer for each additional
acre that is cultivated. Over time, they have plans to hire part-time delivery drivers as
well as bookkeeper.
6.2 Management Team
Frank Burns, will actively manage the farm. Farm management duties will include the
creation of a detailed planting guide and building a living soil. Only sustainable and
organic farming methods will be used with no reliance on off-farm inputs and chemical
pesticides/fertilizers. Growing methods include crop rotation, planting cover crops,
applying finished compost and mulches, and encouraging beneficial insects, weed
management, irrigation and harvesting. Mr. Burns will also be responsibility for
preparing detailed accounting records for their tax accountant.
Kathy Burns will also actively participate in managing the crop during the busy
summer months. During the slower winter months, both will work to complete their Ebooks which will be sold on line and supplement revenue. They will also actively
market Gold Harvests Organic Farm by speaking to local civic groups, providing tours
of the farm, and drafting the weekly newsletters.
6.3 Management Team Gaps
Gold Harvests Organic Farm will rely on its Tax Accountant to assist with tax
reporting.
6.4 Personnel Plan
The following is a summary of Gold Harvests Organic Farms Personnel Plan.
Page 20 of 28
Table 6.4
Personnel Plan
6.5 Board of Directors

N/A
7.0 Financial Plan
The financial plan will cover the following:
Required Cost of Start-Up
Profit and Loss
Cash Flow
Balance Sheet
Financial Ratios
7.1
Important Assumptions
Revenues increase 50% Year One and 33% Year Two
The following variable expenses are tied to volumes and will increase the
same amount as revenue: salaries, fuel charges, postage, repairs and
maintenance and supplies
The loan example is based on traditional lending with a collateralized
working capital loan, fully amortizing with a three year pay down.
The loan interest rate is based on the Prime Lending Rate plus 4.00%; Wall
Street Journal Prime at this writing is 3.25%
7.2 Start-Up Costs

The following chart summarizes start-up expenses:
Page 21 of 28
Table 7.2
Start-Up Costs
7.3 Source and Use of Funds

To date, the owners have come out of pocket approximately $40,600 or 74 percent of
the projects total costs. The following chart summarizes the source and use of funds:
Page 22 of 28
7.4
Break-Even Analysis
Total fixed costs are estimated to be $18,437. The variable costs (salaries, fuel charges,
postage, repairs and maintenance, and supplies) are estimated to be $109.74 per unit
(full share). Units are considered full shares for analysis purposes and do not consider
half shares. Based on the assumption of $750 as the average share price, the breakeven
revenue then is $21,597 or 4 units (shares). This is further depicted in the Table Below
and the Graph that follows:
Page 23 of 28
7.5
7.5.1
Projections
Projected Profit and Loss

Gold Harvests Organic Farms estimated profit and loss for the initial three years
of operations is reflected below:
Table 7.5.1
Pro Forma Profit and Loss
Page 24 of 28
7.5.2
Projected Cash Flow

The statement of cash flow shows the incoming and outgoing cash of Gold
Harvests Organic Farm:
Page 25 of 28
Table 7.5.2
7.5.3
Pro Forma Cash Flow
Projected Balance Sheet

The following chart depicts the proforma balance sheet:
Page 26 of 28
7.6 Business Ratios

The following ratios are based on the North American Industry Classification System
(NAICS) code 111998 All Other Miscellaneous Crop Farming. The ratio analysis
compares the subject to industry peers based on similar asset size and revenues.
Table 7.6
Ratio Analysis
This business plan template can be downloaded at:

http://www.fastbusinessplans.com/business-plan-template.html
Free sample business plans are available at:
http://www.fastbusinessplans.com/sample-business-plans.html.
Many articles to assist in guiding you through the writing of your business plan are available at:
Page 27 of 28

http://www.fastbusinessplans.com/business-plan-guide.html
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